Hummingbird scoops up RedDot

Toronto-based Hummingbird Ltd.’s recent acquisition of enterprise content management (ECM) vendor RedDot Solutions AG is a sure sign that consolidation is the name of the game in this space, according to one industry insider.

ECM vendor Hummingbird made the announcement last month that it had acquired the Germany-based RedDot in a bid to strengthen its mid-market ECM offerings. The executive management of RedDot will remain in charge of operations, Hummingbird said, adding that RedDot will serve as a subsidiary of Hummingbird and continue to serve all its existing clients globally.

Hummingbird and RedDot are no strangers to each other, as the companies had been in a three-year partnership prior to this announcement, said Andrew Pery, Hummingbird’s chief marketing officer and senior vice-president. The goal is to converge the complementary and respective document management and Web content technologies into a single integrated platform, Pery said.

“The (ECM) market is going through significant consolidation….Web content management is becoming an integral part of an enterprise content platform,” Pery said.

The RedDot product suite will be cross licensed to the existing installed base of Hummingbird customers, with the Hummingbird suite cross licensed in a similar manner to RedDot’s mid-market installed base. RedDot’s customers will still be supported, Pery said, adding that the firm doesn’t anticipate any issues around integrating the two product lines.

Susan Feldman, research vice-president, content management and retrieval software, for Framingham, Mass.-based IDC, said the acquisition should serve to strengthen Hummingbird’s standing within the integrated ECM market segment. The mid-market is currently underserved when it comes to ECM offerings — the acquisition essentially rounds out Hummingbird’s mid-range offerings, Feldman said.

As for RedDot’s customers, it’s unlikely that RedDot would have agreed to the deal unless the product lines were going to be continued, at least in the short term, Feldman offered.

In terms of the overall ECM market revenue, Hummingbird is up there with the top five, which includes FileNet Corp., IBM Corp., EMC/Documentum and OpenText Corp. This market is extremely fragmented, Feldman said. “We’ve watched the market consolidating in the last three years…(with) well over 80 mergers and acquisitions. That’s pretty remarkable and it’s only going to continue,” Feldman said.

The need for ECM tools within the enterprise is growing, particularly as companies strive for unified access to data. Enterprises are coping with growing amounts of structured and unstructured data, Feldman said.

Information has become so central to the workings of today’s enterprise that managing and creating access to it has become more and more important.

And for end users, the market can seem a bit chaotic right now, Feldman said, especially given that there seems to be as many ECM standards as there are vendors.

In choosing a vendor, Feldman says the enterprise should first define the scope of the ECM implementation and how easily the technology can be integrated into its current IT architecture.

“You really need to know why you’re buying it, what you are going to use it for…and how it’s going to fit in with the rest of your software stack,” Feldman said.

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